Govt. defends electoral bonds scheme in SC
15, Mar 2019
Electoral bonds have been introduced to promote transparency in funding and donation received by political parties. Bonds can be encashed by an eligible political party only through their accounts with authorised banks. The bonds do not have the name of the donor or the receiving political party and only carry unique hidden alphanumeric serial numbers as an in-built security feature. The government described the scheme, introduced on January 2 last year, as an “electoral reform” in a country moving towards a cashless-digital economy.
Electoral Bonds Scheme:
- The electoral bonds scheme was announced in Union Budget 2017 with an aim for increasing transparency in political funding.
- It makes India first country in the world to have such unique bonds for electoral funding.
- These bonds are bearer instrument in nature of promissory note and interest-free banking instrument.
- It aims at rooting out current system of largely anonymous cash donations made to political parties which lead to generation of black money in the economy.
- These electoral bonds can be bought for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore after fulfilling all existing Know Your Customer (KYC) norms and making payments from bank account.
- It will not carry name of payee.
- The bond deposited by any eligible political party to its account shall be credited on the same day.
- No payment shall be made to any payee political party if bond is deposited after expiry of validity period.
- Eligible political parties can encash electoral bonds only through their bank accounts.
- Electoral Bonds may be purchased by only citizen of India.
- An individual can buy Electoral Bonds, either singly or jointly with other individuals.
- Electoral Bonds are valid for fifteen calendar days from the date of issue.
- Only registered political parties, that have secured not less than 1% of votes polled in last election of Lok Sabha or legislative assembly of state, will be eligible to receive electoral bonds.
- The cash donation has been capped at Rs. 2000 and beyond that donations are via electoral bonds.